In the Asia-Pacific (APAC) region, there is an increase in consumer preference for sports utility vehicles (SUVs). The market for sport utility cars is expanding more quickly in Vietnam, Japan, China, and India. The largest trend being driven by the increase in small and medium-sized SUVs and crossovers is the development of intelligent all-wheel drive (AWD) and electrical-AWD (E-AWD).
Against this backdrop, the 4-wheel drive (4WD) and AWD market in the APAC region is forecast to register a compound annual growth rate (CAGR) of 2.8% over 2023-28, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “Global Sector Overview & Forecast – 4WD and AWD”, reveals that the 4WD market in APAC is estimated to reach 39.2 million units in 2023 and 44.2 million units by 2028. The AWD market in the region is projected to reach 8.8 million units in 2023 and 10.8 million units by 2028.
Lucy Tripathi, Senior Automotive Analyst at GlobalData, said, “In comparison to sedans and crossovers, SUVs are more in demand due to factors like sharper handling and better traction and grip with AWD systems. Due to the improved economic conditions in both developed and emerging nations, SUV sales have been steadily growing.
“Consumers in the APAC region select passenger automobiles equipped with AWD-type powertrain systems since they may safely operate them on the road in winter or in any dangerous climatic circumstances. Additionally, it is projected that a significant number of electric powertrain cars, including hybrid, plug-in hybrid, and battery-electric vehicles, will be equipped with AWDs. As a result, the market for ICE automobiles and the expanding market for hybrid electric vehicles both predict growth for AWD systems.”
The market for AWD systems is expanding in the APAC region due to safety laws, extreme weather, and consumer preference for safety features.
“The shortcomings of manual AWD systems, such as excessive fuel consumption and high maintenance costs, have been largely solved by the invention of intelligent AWD. Consequently, it is anticipated that automated AWD systems will eventually exceed manual AWD systems in terms of market share. A rise in purchasing power, an increase in consumer demand for safety features, and poor road conditions are the driving factors behind AWD systems,” Tripathi added.
Leading industry players are making significant investments in research and development (R&D) to diversify their product offerings, which will spur further growth in 4WD systems.
Tripathi said, “To grow and thrive in an increasingly competitive and challenging market environment, the four-wheel drive vehicle businesses must provide affordable products.’’